HAGÅTÑA (The Guam Daily Post) — With an islandwide property revaluation potentially looming in the near future, and increased property taxes possibly following, Speaker Therese Terlaje has introduced two measures meant to either break up the application of increased property taxes after the revaluation or defer the tax assessment altogether.
The Department of Revenue and Taxation is required by law to reascertain the value of real property on Guam every five years, with the new valuation to be used as the basis for the island’s real property tax assessment.
According to Bill 265-37 and Bill 266-37, both introduced by the speaker, the last property revaluation took place about 10 years ago in 2014-2015.
The bills state that the Guam Legislature removed funding authorization for the real property tax assessment in the fiscal year 2024 budget bill in an attempt “to delay any adverse impact on the cost of living on Guam.”
However, citing DRT, the bills add that the governor and lieutenant governor are moving forward with the revaluation after allocating $2 million from American Rescue Plan Act funding.
Acting DRT Director Marie Lizama stated last week that the department received three proposals for the islandwide revaluation.
However, Krystal Paco-San Agustin, the governor’s spokesperson, also stated that the procurement process could continue until Attorney General Douglas Moylan resumes his duty to represent government agencies conducting the procurement.
The AG withdrew his office’s representation of agencies under investigation by the office, which includes DRT, due to conflict issues raised by defense counsel in ongoing corruption cases.
Although Moylan said his office will continue to review and approve procurement and government documents, just not as legal counsel for government entities, the governor’s office has called that illegal.
Gov. Lou Leon Guerrero has now filed a request for declaratory judgment at the Supreme Court of Guam regarding the AG’s withdrawal.
Regardless, news of the revaluation drew concern from some members of the community. Two organizations, Pacificnesian Equities LLC and the Micronesian Climate Change Alliance, wrote to the governor’s office, lawmakers and DRT officials on March 29 requesting a pause on the valuation procurement.
The groups said they were concerned about a real estate firm being contracted to perform the valuation and asked a number of questions about how the revaluation would affect the island and the cost of real property on Guam.
The groups suggested there could be better ways to generate revenue, such as potentially taxing big businesses and military contractors, and asked if the revaluation could be done by a government agency.
Bills 265 and 266 both state within their findings and intent that the anticipated islandwide property revaluation is poised to inflate real property taxes for all categories, partly because it has been a decade since the last tax assessment.
“This increase may significantly escalate the already high cost of living on the island. This resulting economic strain may put residential landowners at risk of losing their homes and potentially exacerbate the existing housing shortage,” the bills state.
The bills are intended to protect or ease the burden on single-family homeowners on R1 (one-family dwelling zoned) properties, bona fide farmers on agricultural zoned properties, or A zoned, and owners of undeveloped R1 or A zoned properties.
Bill 265 defers any increase in property tax assessments resulting from the 2024-2025 revaluation of real property for single-family homeowners on R1 properties, bona fide farmers on A zoned properties and owners of such zoned but undeveloped properties.
The deferral will remain in effect for the current landowner until such time that ownership is transferred, Bill 265 states.
Bill 266 phases in any increase in taxes following the revaluation for that same group of property owners.
The phase-in occurs over five years, with the first phase applying 20% of the tax increase one year post-revaluation. Subsequent phases each increase the percentage by 20%, finally reaching 100% of the tax increase five years post-revaluation.
Therese Terlaje
